One of the best small boutique Mortgage Brokers in California! Client always comes first! CA DRE Lic. No. 01458657

Tuesday, August 30, 2016

This week in review!!!

This week in Review

Provided to you by

Jeff
Eisenberg

Jeff Eisenberg

Southern Oaks Mortgage, Inc.

Office # 661-964-2600

Cell # 661-904-5989

Email: jeff@somloans.com

NMLS: 236681

CalBRE Lic.# 01458657

Weekly Review

Bond prices fell
and yields rose, predominately on Friday, as a greater number of investors came
to the realization that the Federal Reserve’s Federal Open Market Committee
(FOMC) could raise interest rates as soon as their next meeting on September
20-21.The financial markets essentially
“tread water” during the week in anticipation of what Fed Chair Janet Yellen would
say about future monetary policy during the Fed’s annual Jackson Hole symposium
late Friday morning.

While Yellen didn’t
specify when the FOMC might raise interest rates, she stated the FOMC "continues
to anticipate that gradual increases in the federal funds rate will be
appropriate over time to achieve and sustain employment and inflation near our
statutory objectives.Indeed, In light
of the continued solid performance of the labor market and our outlook for
economic activity and inflation, I believe the case for an increase in the
federal funds rate has strengthened in recent months.”She also commented that the Fed still
believes future rate increases should be “gradual” and data dependent.

Speaking of data
dependency, Fed Vice Chair Stanley Fischer previously said the August
Employment Situation Summary (Jobs Report) would be a major factor in
determining the FOMC's decision on whether or not to raise rates at their
September meeting on September 21.As a
result, the next jobs report scheduled to be released on Friday, September 2
will take on added significance for investors.

In housing news, New
Home Sales reached their highest level in almost nine years during July by
climbing an extremely robust 12.4% to a seasonally adjusted annual rate of
654,000 units.The consensus forecast
had been for a reading of 580,000 homes.June's sales rate was revised lower to 582,000 units from the previously
reported 592,000 units.On an annual basis,
New Home Sales were 31.3% higher than a year ago.New home inventory fell 2.9% to 233,000
units, the lowest level since November 2015 and at July's sales pace it would
only take 4.3 months to clear the current supply of new houses on the
market.The median sale price for a new
home was reported at $294,600, a 0.5% decline from a year ago.

Additionally, the
US Federal Housing Finance Agency (FHFA) released their Housing Price Index for
June showing a 0.2% increase following a 0.2% gain in May.Economists had expected a slightly stronger
gain of 0.3%.According to the FHFA, housing
prices have gained 5.6% from the second quarter of 2015.

Furthermore, the
National Association of Realtors reported Existing Home Sales fell 3.2% in July
to a seasonally adjusted annual rate of 5.39 million units.Existing Sales were 1.6% lower than the year
ago period and were below the consensus forecast of 5.54 million but still
remain strong.The median home price
increased to $244,100, a 5.3% gain from the year ago period.The dip in sales in July may be temporary
however as there may have been a bottleneck in the sales process due to delays
with appraisals.Many real-estate agents
have complained about delays with appraisals so if this problem gets resolved,
sales going forward could pick up.

As for mortgage
lending, the Mortgage Bankers Association (MBA) released their latest Mortgage
Application Data for the week ending August 19th showing the overall seasonally
adjusted Market Composite Index decreased 2.1%.The seasonally adjusted Purchase Index fell 0.3% from the prior week,
while the Refinance Index decreased 3.0%.Overall, the refinance portion of mortgage activity increased to 62.4%
of total applications from 62.6%.The
adjustable-rate mortgage share of activity was unchanged from 4.6% of total
applications.According to the MBA, the
average contract interest rate for 30-year fixed-rate mortgages with a
conforming loan balance increased from 3.64% to 3.67% with points increasing to
0.34 from 0.31.

For the week, the
FNMA 3.0% coupon bond lost 1.5 basis points to end at $103.52 while the 10-year
Treasury yield increased 4.81 basis points to end at 1.6279%.Stocks ended the week lower with the Dow
Jones Industrial Average losing 157.17 points to end at 18,395.40.The NASDAQ Composite Index dropped 19.46
points to close at 5,218.92, and the S&P 500 Index fell 14.83 points to
close at 2,169.04.Year to date, and
exclusive of any dividends, the Dow Jones Industrial Average has gained 5.28%,
the NASDAQ Composite Index has added 4.05%, and the S&P 500 Index has advanced
5.77%.

This past week, the national average 30-year
mortgage rate decreased to 3.41% from 3.42% while the 15-year mortgage rate decreased
to 2.75% from 2.76%.The 5/1 ARM mortgage
rate rose to 2.86% from 2.85%.FHA
30-year rates held steady at 3.25% while Jumbo 30-year rates decreased to 3.51%
from 3.53%.

Mortgage Rate Forecast with Chart

For the week, the FNMA 30-year 3.0% coupon bond ($103.52, -1.50 basis points)
traded within a wider 44 basis point range between a weekly intraday high of
$103.88 on Friday and a weekly intraday low of $103.44, also on Friday, before
closing the week at $103.52.

The bond initially
moved higher ahead of Janet Yellen’s speech Friday morning and continued to
trade a little higher immediately afterward.However, when traders heard subsequent comments made by Vice Chair
Stanley Fischer during an interview on CNBC two hours later, they felt there
was increased “hawkish” sentiment among Fed officials.Fischer said the comments in Yellen’s speech
“were consistent with the idea there could be a rate hike in September and
again later in the year,” and this helped to trigger a sell-off in bonds Friday
afternoon.

The
day’s action resulted in move below the 25 and 50-day moving averages (MA)
located at $103.696 and $103.61 respectively.The 50-day MA reverts to closest resistance while the 38.2% Fibonacci
retracement level at $103.15 becomes the next support level.The slow stochastic oscillator now shows a
solid negative crossover sell signal with the %K line falling below the %D line
suggesting a continuing move lower in bond prices that may result in slightly
higher rates.

Chart:FNMA
30-Year 3.0% Coupon Bond

Economic Calendar - for the Week of August
29, 2016

The
economic calendar features several reports on the labor sector highlighted by
the August Employment Situation Summary (Jobs Report) on Friday.Economic reports having the greatest
potential impact on the financial markets are highlighted in bold.

In 2011,
the American Academy of Pediatrics (AAP) released a bold
recommendation: children under the age of two should not watch any television,
and slightly older children should be limited to two hours of screen time per
day.

A recent
report shows that children’s screen time continues to increase: in 2013,
38 percent of kids under two were found to have used a mobile device for media,
compared to 10 percent in 2011.The
number of children using mobile devices on a daily basis has more than doubled
during this period – from 8 percent to 17 percent.

The AAP
has announced that it will be revising its screen time policies this
fall to reflect current trends in technology use among U.S. families.

This fast-growing
media industry – and more specifically the growing market for children’s media
– poses the inevitable questions for parents: whether screen time is bad for
children and whether children can learn during screen time.

What children learn
from screens

There is substantial
evidence that preschool children can learn from educational media.For example, a 2001 study showed
that watching educational programs at ages two and three could improve academic
skills, including reading, vocabulary and math.These kids performed better on standardized tests and general school
readiness assessments, when tested some years later.

Educational programs such as ‘Sesame Street’ can improve
academic skills.

A more
recent study that examined the long-term effects of watching “Sesame
Street” from the time the show first aired in 1969 found that kids who watched
the program showed better academic skills.

The researchers
reported that children who lived in areas that had access to the show were
about 14 percent less likely to fall behind in school than children who did not
have access.This effect was especially
pronounced for children living in socioeconomically disadvantaged areas.

Similar learning
benefits have been reported for other educational programs as well.For example, one study reported
that kindergarteners who viewed “Between the Lions” (a PBS show designed to
promote reading) scored higher on standardized tests of reading skill than
those who did not watch the show.

Here’s a cautionary
note about infants

However, this does
not mean that all children can learn from educational media, that every show is
educational and that there aren’t better ways to learn.

Children do not
necessarily learn from every television show they watch.The same 2001 study that reported
that children who watch educational programs score better on standardized tests
also reported that preschool children who watched non-educational, general
audience programs showed poorer performance on standardized
tests of vocabulary and math than those who did not.

Furthermore, there is
little evidence that infants under the age of two can learn from educational
media at all, including television and touchscreens.

In fact, it is
unclear whether infants under two can even understand the content of what they
see on television and whether they can transfer information that they see
in a two-dimensional format to the real world.

There is little evidence that infants gain from
educational media.

Researchers who
examined a popular educational DVD designed to teach 12- to 18-month-old
infants new words found that not only did they show no gains in vocabulary, but
also that the best improvement in vocabulary came when parents taught them new
words.

Being wise about
screen time

So, how should
parents think about their kids' screen time?

First, age
matters.As mentioned above,
preschoolers can learn from age-appropriate educational media.But, there is no evidence that infants can
learn from screens.So parents should
have very few expectations about what children under the age of two can gain
from watching television.

Second, content
matters.With the abundance of educational
programming available for children these days, there is no reason to expose
them to content aimed at a general audience, especially since watching
adult-centered TV has been shown to lower academic skills in preschool
children.Moreover, programs aimed at
adults that have violence or aggressive behavior can encourage
children to behave similarly.

Third, time
matters.Having the television on all
the time in the background has been shown to distract children so
much that it lowers the quality of their play. Researchers have
suggested that if screen time replaces time spent engaging in activities like
talking to parents and peers or playing outside, it can be detrimental to
various aspects of development.

Perhaps the most
important finding to keep in mind about screen time is that children
learn better from people than they do from screens until they are at least
three years old.

So in the end, a
little bit of screen time might be okay, but learning the traditional way –
from parents or from peers – might always be the most effective medium for
infants and young children.

About Me

Jeff graduated from California State University, Northridge. He obtained a BS Degree in Business Administration in 1991. During and after college, he worked at Bank of America as a Preferred Banking Officer and then, in 1993, joined Automatic Data Processing, Inc. as a District Manager until 1998. While working for ADP, he applied for his real estate license and began working part-time as a loan officer for a mortgage company in Simi Valley. This is where he found his niche in business and a love for an industry that he still enjoys today. He opened his own mortgage company with a partner in 2002 and then branched off on his own in 2004 to open Southern Oaks Mortgage, Inc. (CA DRE Lic. No. 01458657)located in Valencia, CA. He is now a published Author with his new book, "Makers & Breakers: A Simple Guide to a Successful Mortgage Loan".